<aside> 💡 “Latin America and the Caribbean are the world’s breadbasket and lungs,” Michael Morris, Lead Agriculture Economist @World Bank.
The agricultural industry worldwide is facing dramatic disruption. The increasing demand for food coincides with unprecedented constraints on its supply, including limited available land, escalating energy costs, and rising labor expenses, all of which are placing downward pressure on business margins. The number and intensity of extreme climate events are increasing to make things even more challenging. This puts extra pressure on supply chains, wiping out entire farming areas with just one drought and disrupting regular growing seasons and resulting crop yields. In light of these global trends, Latin America is a source of optimism, as it has boosted agricultural productivity (yields) more rapidly than any other developing region. The direction agricultural innovators take in the coming years and the technological advancements they develop will hold significant implications for the health and well-being of the population.
Latin America has historically been limited by high market fragmentation, small batch farming practices, and large-scale subsidies keeping incumbents in operation. Most farms, even if large-scale commercial, lack the funding, implementation resources, ongoing management expertise, or data to inform and scale a digital transformation of their production and time to experiment. This has historically turned away innovation, and yet, more recently, we have observed a transformation.
Despite all the risks faced (or because of them), the Agtech sector is gaining traction in LATAM with over 1,000 startups in the region, accelerating the maturity of the space.
In the field of food tech, advances in food science have highlighted the environmental implications of conventional farming and have introduced cost-effective alternatives, such as synthetic meats, plant-based products, and sustainable options like kelp-based corn substitutes. NotCo recreates animal products like meat and dairy through sustainable plant alternatives. Michroma develops fungal-based biofactories to produce natural ingredients in a sustainable, scalable, and cost-effective way. microTERRA produces nutritional & functional ingredients for plant based foods in an affordable and sustainable way.
These innovations, alongside AgTech, play a crucial role in reducing the environmental footprint of our food system without requiring drastic changes in consumer behavior.